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Money and Credit: a Never Ending Debate

François Meunier * Économiste, ENSAE ; chroniqueur et auteur de livres ; animateur, site Vox-Fi.Contact : Francois.Meunier@ensae.fr.


How far should we go in separating the business of lending from the business of deposit and money management within the banking system? This is a debate that is taking on new vigour today and that is revisited by the present article in the light of monetary history. Indeed, the arguments exchanged over the last two centuries are still relevant today. The article focuses particularly on two major episodes in the history of monetary reforms: that of 1844 in the United Kingdom and that of 1935 in the United States. This debate has been rekindled today following the major technological breakthrough in the means of payment that has occurred over the past decade. What was advocated by the supporters of the separation of the lines of business may very well become unavoidable following the rise of digital currencies, especially those issued by central banks?


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